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Nonprofits, Issue Advocacy, and Politics

CCI EDITORS NOTE: This is extremely important information regarding non-profit organizations and their rights under the First Amendment.

From Wagenmaker Oberly:
In the midst of the IRS’s proposed regulations to impose new restrictions on Section 501(c)(4) social welfare organizations, it is critically important to remember that both Section 501(c)(3) public charities and Section 501(c)(4) organizations enjoy a First Amendment constitutional right to engage in “issue advocacy,” so long as such
communications are not “too” political or otherwise improper. In a nutshell, that means these organizations – and their leaders – should be able to educate people about a wide variety of public policy issues in order to promote their tax-exempt purposes, without losing their tax-exempt status or otherwise being subject to government interference.

A key question exists within this legal paradigm for any nonprofit’s issue advocacy. Namely, if its educational communications address issues that are also covered through politics, then may the IRS therefore question – or even prohibit – such speech? An organization’s involvement in politically tinged issues should not necessarily trigger such government scrutiny. In other words, just because a political party or candidate latches on to public policy issues does not render them “political” per se.